Situation
The client was a growth equity firm partnering with B2B software companies with a track record of 25+ strategic investments and 19 successful exits. The client wanted JMI to help them improve and streamline their deal-sourcing process. The criteria for identifying investment opportunities were as follows:
- B2B SaaS companies that have secured < $10 million in funding with a 15–125 workforce strength.
- Prospective companies not located along the West Coast.
- Outsourcing, staffing, solutions, consulting, system integrators, resellers, and companies with proprietary hardware are not to be considered.
- The Top management of the company should be based out of North America only.
JMI Implementation
JMI was involved in the end-to-end process of deal sourcing, including:
- A custom web scraping tool was built to extract data from multiple unstructured data sources based on specific criteria such as employee count, funding raised, investors, company description, company geographic location, and company sector.
- The tool filtered the results based on specific criteria such as company brand value, customer sentiment, product portfolio, social media posts, customer reviews, management team, and other unstructured data.
- By looking at relevant data patterns and trends, the model conducted early detection of companies with high growth opportunities and decided whether it was an opportunity worth pursuing or not.
- This was further refined through manual shortlisting by analysts based on investment criteria.
- Clustering analysis was also undertaken from the collected data points to further understand the geographic spread of companies shortlisted based on investment criteria. The analysis revealed that a lot of SaaS start-ups were getting set up in the states of Arizona, Texas, and Michigan.
- The shortlisted companies were added to the client's CRM portal, and custom outreach emails were sent to them.
- A deck of short notes for preparation before the client's call with the prospect company management was also shared with the client.
- Promising companies for the future were also flagged, labeled, and added to the CRM portal with an alarm to check on their status 6 months down the line.
Results
The outcomes achieved were the following:
- Increased deal flow by 30%
- Screened over 30,000 companies from different pools of data and shortlisted around 3,000 companies.
- Helped the client save 40% of time.
- Helped improve the accuracy of shortlisting and segmentation from 40% to 90% (approximately).